Friday, 24 July 2020

The 2020 United States Civil War

Slavery and racism are the two most abhorrent, and degrading sins committed by humanity. While banned in modern society, slavery still exists, and racism in many forms is still practiced by many. Recent events triggered by the murder of George Floyd by a policeman in Minneapolis have escalated to the point of a revolution around the world, but in the United States it is culminating into a civil war.
For the past two months daily protests in the United States and many cities around the world, have brought society to the realization that racism still exists and that it is time that we address the harm done by ignoring it. However, what is happening in the U.S. is a storm which has been brewing for decades. The gains made by the Civil Rights movement under Martin Luther King, have in many ways helped the black community, but in some cases it has not benefitted the masses, and racism in law enforcement still exists in many communities. We are not living in the sixties anymore, Americans elected its first Black President twice, and Obama had the opportunity to make radical changes under his ‘Hope and Change’ slogan, but he failed. The Democrats who believed that they had the opportunity to create a dynasty chose Hillary Clinton to replace Obama and hold its power base, but the election of Donald Trump changed everything.
The turmoil we see today is the culmination of years of planning by the left to change what America stands for. In the sixties and seventies the radical left militant organization The Weather Underground (WUO) goal was to overthrow what it viewed as American imperialism. In the seventies the WUO conducted a bombing campaign targeting government buildings and several banks. They obviously failed it their ultimate goal, but many of its followers joined academia and created a base for the indoctrination of students in universities and education in general. The result is that many Millennials and GenXers are the product of this education revolution, which has produced, political correctness, ‘cancel culture’ and a radical view of the freedom of speech, which today seems to be only the right of the radical left. Oppose the left on any of their views and it will result in banishment, expulsion, and ostrazisation. Too often these positions of the left have been adopted and practiced in the main stream media, thus fomenting a point of view that supports what the WUO had failed to achieved decades ago.
There is no doubt that racism exits in many forms. In the U.S it is mostly manifested in the treatment of blacks by law enforcement. While the vast majority of the police force is not racist, there are many rogue elements that still use their power to discriminate, and which recently saw the murder of George Floyd. The inability to deal with these rogue officers has created antagonism towards law enforcement to the point of giving rise to the Black Lives Matter (BLM) movement. While homicide accounts for the death of 7,500 young blacks each year, the debate now is whether black lives matter, or does all lives matter? It is not popular to say that   ‘All lives matter’, because it may be interpreted as not supporting ‘Blacks’.
The rise of the BLM Inc. and the Antifa group is at the root of the massive problems experienced in many Democrat run States and Cities. Politicians have been coerced into supporting these groups for fear of not being re-elected and thus support the  ‘defunding’ of the police and in many cases deny that some peaceful protests are not what they seem to be  – rioters and anarchists. Many peaceful protests turn into riots, arsons, and shootings after dark. These demonstrations resulted in the takeover of many cities like Seattle, Portland Minneapolis and even New York.  It seems that the mob has gained control of elected officials who have become reluctant to safeguard their communities. What is not being discussed is that hundreds of millions of dollars have been given to BLM Inc. by corporations like Nike, Starbucks, Apple and even the NFL. Where is the money going? It is certainly not helping blacks in poor cities around America governed by Democrats. On the Board of BLM sits Susan Rosenberg a convicted terrorist pardon by Bill Clinton. It is also alleged that much of the funds garnered by BLM Inc. is funnelled to the DNC. Cities are burning, people, mostly blacks,   are being shot and killed every weekend, and where is the outraged by BLM? Instead we see attacks on government buildings, looting of small and large businesses and yet Democrats do nothing but accuse the Trump administration of fomenting riots by sending troops to guard federal buildings in these cities under siege. Trump on the other hand should be very careful about sending troops into cities without being asked and allowed to do so, because that would go against what James Madison stood for. So far Democrat led cities have resisted asking for federal help. In an attempt to further damage the re-opening of the country, while pediatricians ask for the re-opening of schools. teachers’ unions are reluctant to do so, in fairness there is an element of safety for teachers, but mostly in an attempt by the left to damage the economy which has been Trump’s strong suit.
Despite his faults and tendency to exaggerate Trump has done far more in three years to help the minorities than his predecessors. Before the advent of Covid-19, his economy has seen massive gains in employment for Blacks and Hispanics. As reported:  “The First Step Act, which Trump signed into law, expanded judges’ discretion to ignore mandatory minimum sentences in some cases. The law also shortened some mandatory minimum sentences, such as from life to 25 years or from 20 years to 15 years, for various offenses.”
Democrats who have been unable to accept the defeat of Hillary Clinton by Donald Trump have tried for 3 years to undermine his Presidency. They have conducted investigations and impeached him, on charges of collusion with the Russians and abuse of power. They are now afraid that their plans are going to be nullified as more information is coming out that the attacks on Trump was a conspiracy by  some members of the FBI and perhaps even the former administration. The Democrats have been mostly silent of the riots, and the name of George Floyd has been very quietly set aside in the recent debates. The media always stating that the demonstrations were ‘peaceful’ in nature cannot be true when there are deaths associated with nightly protests after midnight.
How political is the race issue for Democrats? Remember that the only elected black President Obama endorsed a ‘blackface’ Justin Trudeau for Prime Minster of Canada? In what can be political manna from heaven to the Democrats, the world was hit by a pandemic, and Covid-19 has changed everything as the world economy went into recession. Members of Antifa who routinely wear masks to foment riots and loot small and large stores, are now protected from identification because of the Covid-19 ‘mask protocol’.  Former VP  Biden as the Democrats ‘ choice to challenge Trump is a very hard task, as the candidate stays in a basement and continues to make comments that are mostly incoherent and embraces the polices of the radical left supported by Sen. Sanders, Warren, and the far left members of Congress A. Ocasio-Cortez and Omar. Biden who has been in politics for four decades has a track record of supporting white supremacists and has made racist comments over the years. To use the race card could be difficult this time.
 The Democrats’ hate for Trump and a lust for power supersede any semblance of putting the country first. The 2020 Presidential elections may not be a war with weapons, although in the mainly Democrat run cities bullets have been flying for the past 55 days,  it will certainly be a Civil War of ideas.
Where does America want to go? Will the U.S embrace the goals and tactics of the Weather Underground and move to the far left and embrace socialism with Biden? The result will not only affect the United States but the rest of the world as we enter a real Cold War with China. All empires fall, but is the world ready for the United States to join the globalist movement and relinquish sovereignty to a New World order run by a failed United Nations. Be careful what you wish for, because it seems that the Democrats and Biden are ready to do so.

Friday, 26 June 2020

Five Eyes; but no 20/20 vision

Since the beginning of the year, the world has been gripped in an atmosphere of constant crisis. With Covid-19 being declared a pandemic and resulting in a recession caused by non-financial factors, enemies of democracy have taken a strategic path to attack the western world. The response has been muted in most cases, and in Canada’s case it has been quasi subservient.
In addition to the pandemic, the Trump Presidency is facing turmoil on many fronts. Early this year in a purely political move, the Democrats impeached the President, with dubious accusations of ‘abuse of power’ and ‘obstruction of justice’ in an attempt to unseat a duly elected president. Ever since his election, he has been hounded by his opponents, and a bias media. To add to his problems the tragic death of George Floyd at the hands of a rogue racist policeman, has resulted in protests against racism and a quasi-civil war.  In an election year this state of chaos has given the enemies of the United States a perfect environment to challenge and conduct attacks on different fronts.
It is said that while the cat is away the mice will play With Trump being undermined by his domestic opponents; the forces of evil are ready to take advantage. North Korea, has resumed its skirmishes with the South in an attempt to garner attention. Iran has declared that they have more nuclear material enough to be close to producing a nuclear bomb. Russia and China are ratcheting their tactics to cause problems in many parts of the world. China has attacked India’s borders, while Russia is increasingly invading the allies’ air space. China has affected a massive cyber-attack on Australia, and these are only a few of the many geopolitical threats.
The ‘Five Eyes’ (FVEY) organization is an intelligence alliance made up of the United Kingdom, United States, Australia, New Zealand, and Canada. It is the foremost known intelligence alliance in the world. The members monitor and share information about espionage, and they also spy on each other and share information to circumvent domestic regulations on their own citizens. In recent years one of the biggest concerns of the organization has been the expansion of Huawei, the Chinese telecom giant at the forefront of 5G development. With Huawei’s connections to the Chinese Government it is feared that the integrity of networks in the alliance countries may be compromised if they choose to use the system. The U.S has been strongly opposed to the use of Huawei as a provider of 5G technologies, and it has caused frictions in the telecom world and trade with China. Furthermore, the 2018 arrest in Vancouver of Huawei executive Meng Wanzhou facing fraud charges for allegedly violating U.S. sanctions on Iran and avoiding extradition to the U.S has exposed the retaliatory tactics of the Chinese government.
The Chinese arrest of two Canadians, Michael Kovrig and Michael Spavor, is seen as a pure retaliation and hostage taking to enable the release of Meng Wanzhou. Not to be left out of the attack on the West, Russia arrested and charged another Canadian Paul Whelan with spying, once again trying to negotiate a spy swap with the U.S.
Since the Five Eyes alliance is all about monitoring online activities of internet users, there is a need for users to keep their online sessions safe. But it seems that in recent days there has been a complete failure in identifying the real threats to western democracy. The riots and protests in the United States and other parts of the western world by anarchists, like Black Lives Matter and Antifa, is no doubt being coordinated through social media. Given the nature of the ‘new cold war’ it would be remiss to think that foreign ‘bots’ are not at work to foment these riots.
What is concerning is that western allies are paying very little public attention to the real nature of the protests, which have completely ignored their original basis – the death of George Floyd. These riots have now included the destruction of statues of historical figures, and demands to re-write history. Governments around the world are being coerced into abandoning law and order to appease a mob which originally had legitimate grievances against racism but which now has morphed into a rebirth of Bolsheviks, and communism supporters, too often supported by Liberal politicians for selfish gain at the ballot box.  The destruction and demands are the result of a generation of protesters being indoctrinated by a Liberal education system. Even politicians and former diplomats, mostly of the ‘progressive persuasion’ are now even suggesting that we should give into blackmail through hostage taking by foreign governments. Ironically, Canada’s PM Trudeau made the decision not to give in to these suggestions. It is not that he was doing the right thing but that it is the common sense thing to do, given that for the past two years he has been absent on foreign affairs while pursuing his selfish goal of getting a seat on the U.N’s Security Council.
The FVEY has been operating under a cloud of political correctness, cancel culture and soft diplomacy while the enemies of democracy have been operating a covert war through cyber space to undermine the very fabric of freedom of speech and democracy. Social media is now fast becoming the weapon of choice for our enemies, and it seems that they are winning. We are now living in a perfect storm which could destroy years of relative world peace. The hate and contempt for Trump, because of his desire to challenge the status quo, has seen even members of his party abandon him on major policies. The danger is that the world may descend into a state of anarchy and move the free world towards more government control and cede national sovereignty to a disgraced and dysfunctional United Nations. Is that the desired vision for the future?

Saturday, 30 May 2020

Calgary Council’s inability to cut taxes.

Calgarians have received their 2020 tax bill, and this year it is accompanied by a letter from the Mayor to explain how the tax works. Some of his claims may not be called lies, but they are certainly an opportunity for Calgarians to draw the wrong conclusions.
The economic hit caused by Covid -19 has been more severe than the last recession. The last recession was caused by a financial disaster in the banking sector, the disruption was bad but not a severe as the one we are experiencing today. With Covid-19 it has been one that has disrupted the very fabric of society. People have lost their, jobs, businesses have closed, some for ever and governments have accumulated massive debts to finance the economic collapse. These debts will have to be repaid in the future and taxes will have to go up to pay for the excesses of governments who used the crisis to implement some of their political agendas. Sacrifices will have to be made, and some governments realize that, and will adjust, but that is not the case for Calgary.
In Calgary the current Council has been made aware of their excesses long before the pandemic. Yet they never listened and continued to spend without any regard for risk management. The latest property tax increase of 7.5% comes over and above many increases in fees and utility rates. There is also the re-alignment of the tax burden between residential and business tax. This shift also increased the residential tax rate. While there has been a deferral and elimination of the penalty for late payment of taxes nevertheless that does not mean that the tax is reduced, it is just delayed. What of the businesses that have been closed for months and who may be closed forever. There is no tax rebate there.
What are questionable in the Mayor’s letter are the claims of savings amounting to $740m in cuts, and that the budget was increased by 1.5%. The reality is that the budget was increased by a lesser percentage but was increased nevertheless – this is not a saving. A real cut means that you reduce the total amount of the previous year’s budget, not increase it by a smaller amount. Furthermore, the City does not use the Consumer Price Index, they use the in-house concocted Municipal Price Index, so when they say that the tax increase is less that the rate of inflation, it is based on their index not the real inflation rate.
The other claim that the average increase per household will be $11.25 monthly or $135 yearly is another obfuscation. The fact is that most household have seen increases closer to $20/month or even higher. Council will tell you that this small increase is justified – as it is the equivalent of less than the cost of a daily cup of coffee. What citizens must realize is that the cost of this cup of coffee never decreases over the years. The only way to see a reduction in your taxes is a cut in total expenditure, but that is never the case in Calgary, in fact Council keeps adding more expenditure to the already long existing list.
While we must acknowledge that the current Market Value Assessment system is a factor in the problems experience by municipalities in Alberta, we must also recognize that when there is a clear reduction in the revenue base, a difficult decision must be made to make the appropriate reduction in expenditure to balance the deficit. Unfortunately for Calgarians, this decision has never been made. When the Mayor claims that Calgarians are charged among s the lowest taxes in Canada they forget to tell you that for 2020 Edmonton was able to have only a 2.5% residential tax increase , and freeze of property taxes for non-residential ratepayers.
To reduce the Calgary 2020 tax burden, Council had some alternatives. Councillor Farkas proposed to use the Sustainability Fund, Public Arts Fund and Corporate Welfare Fund to be used to rebate the residential tax, and a property tax freeze instead of the 7.5% tax increase. The motion was reluctantly seconded by Councillor Chu. But more importantly it was vilified by his colleagues and the vote for the tax increase was 13 for and 2 against. More importantly to justify their votes some Councillors claim that they actually voted against the budget – a real canard. A vote against a budget means nothing if ultimately you vote for a  tax increase based on that same budget.
With Covid-19, there are going to be some drastic changes to the economy. How business operate and how and where people work, as well as how services are delivered will cause disruptions that we have never seen before. While the private sector will adapt, I fear that the public sector will not, at least not in Calgary. The past is a prognosticator for the future, and given the performance of the current Council it is very difficult to see how things will change, to use the words of Councillor Sutherland, in my opinion it is quite clear that Council ‘has a limited skill set’.

Tuesday, 26 May 2020

Municipal Finances are not what they seem to be

Ever since my interview with Danielle Smith on April 28th, I have received a number of kudos and requests to elaborate on the City of Calgary Finances. Many listeners have asked me to explain the differences between a Budget and the Annual report.  While I am going to use the City of Calgary as an example, the comments can be applied to any municipality in Canada, since they use the same methodology and accounting standards to report their finances.
         The budget is a mere wish list, it is a plan, expressed in quantitative, usually monetary terms, using a modified cash basis, and covers a specified period of time usually a year. The City of Calgary does a 4 year budget. Each program’s objectives are translated into terms that correspond to the spheres of responsibility of the managers charged with implementing them. It is a list of proposed expenditures and is the basis for raising revenues to cover the costs and establish the taxation rate for the period. The budget is not independently audited.
          The Annual report, on the other hand, is a picture of the financial position of the City at a specific point in time usually December 31st.  It is the net worth statement of the organization and all items shown are recorded at their historic cost. The report is prepared using accrual accounting  as prescribed under Public Sector Accounting Standards  which recognizes economic events and  more accurately reflects economic reality. The final report is audited by an Independent Auditor
The differences in methodology and accounting standards, not only cause confusion for the ordinary citizen, but also enable politicians to obfuscate the real financial status of an organization.  These days every municipality is claiming poverty and either are demanding more funding from other levels of government or are busily seeking to expand their tax base, and increasing taxes to cover their large expenditures. A study by the C.D. Howe Institute in 2019 showed that 31 municipalities in Canada had accumulated surpluses of $11 billion.
Let us focus on Calgary 2019 Annual Report. When the results are republished in the newspapers, the details that I am going to use are never showed, and these are the figures that citizens should really care about.
         Accumulated Surplus $21,025B (2019), $19, 695B (2018) an increase of $1,330 B
         The Accumulated surplus of $21,025 B is made up of the following:
         Equity in Non-Financial Assets including Enmax and other Capital Funds $18,532B
         Reserves of $2,494B, including $426m in the Fiscal Satiability(Rainy Day) Fund
         Expenses $3,914B of which $1,980B were salaries and benefits
         Long-Term Debt $2,889B
The problems and confusion exist for several reasons, one that the budget and annual reports are produced under different sets of accounting standards. Then the reporting of annual results is published in a manner as to portray a rosy picture instead of details that will show the true and transparent picture of the financial state of the organization. So much so that after the interview, I received a stern comment from Councillor Davison’s Special Project Contractor, who was paid $18,000 in 2018, which proves how confused things are at City Hall, he wrote: “All of which has nothing to do with the 2019 annual report or the accumulated surplus which is mostly capital works. The city owns $87.4 billion in assets. Some are bound to increase in value… if you want to file a complaint with the ethics commissioner against city council members go for it”.
I don’t know if it is only the contractor who is confused or is it that Councillors are too, because these are the facts, the City does not own $87.4B in assets, Tangible Capital assets as at December 31st 2019 were $18,48B. The bigger issue is that acquiring capital assets requires funds that are borrowed or received from other levels of government. Maintenance of these assets requires operating costs. Since a municipality does not really produce any product the funds must come from taxes, and there is only one taxpayer even if the money comes from higher levels of government. As for the increasing value of City Assets; has anybody seen the City sell an asset at a profit and return that money to the taxpayer? May be once but not on a regular basis. There is the recent proof; ‘the bill to tear down the Saddledome will mostly fall to the city at an estimated cost of $12.4 million (the Flames’ contribution to the demolition will not exceed $1.5 million).
I have covered and wrote about Calgary’s City finances for over 20 years and have taught Public Sector Finance, now with The Institute for Public Sector Accounting, I contribute to the Daniele Smith show on QR770, and other media to hold Council accountable for their actions. I am concerned Calgarians do not get the full story and that perhaps even Councillors do not understand the ramifications of their decisions on budgets and financial matters. Voting against a budget does not mean anything if you vote for a tax increase resulting from the budget.
 In conclusion I would ask Calgarians and for that matter citizens of other municipalities to demand more transparency and accountability from their elected officials. What they tell you may not be what is real.